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The amount of tax revenue that Michigan online casinos are projected to generate for the state is set to reach an unprecedented level.
Playinmichigan’s projection for the year 2025 suggests that the 15 online casinos in Michigan will generate approximately $368 million in tax revenue. This represents a significant 27% increase compared to the previous year’s figure. Moreover, it surpasses the combined tax payments made by online sports betting and casinos in 2022.
Our projections are based on the calendar year, while Michigan’s fiscal year runs from October through September.
What does Michigan online casino tax revenue pay for?
Although education is technically placed at the bottom of the distribution priority list, it receives the largest portion of tax revenue generated from online gaming.
The Internet Gaming Fund receives 65% of the tax revenue generated by commercial operators like BetMGM, FanDuel, and Barstool online casinos, while 70% of the tax revenue from tribal operators also contributes to this fund.
Below is a breakdown of the remaining information:
- The City of Detroit receives 30% of the tax revenue generated by commercial operators.
- The Agriculture Equine Industry Development Fund receives 5% of commercial operator tax revenue, capped at $3 million.
- Local governing bodies receive 20% of the tax revenue generated by tribal operators.
- The Michigan Strategic Fund receives a 10% share of tax revenue generated by tribal operators.
The payout order for the Internet Gaming Fund is as follows:
- If the City of Detroit receives less than $183 million in gaming related tax revenue for the previous fiscal year, it will be eligible for a payment. However, the amount of this payment cannot exceed 55% of the total gaming tax deposited in the Internet Gaming Fund, after subtracting the 30% internet gaming tax revenue received by the City of Detroit.
- The Lawful Internet Gaming Act is regulated and enforced by MGCB.
- The administration and enforcement of millionaire party activity under the Bingo Act is carried out by MGCB.
- A sum of $500,000 will be donated to the Compulsive Gaming Prevention Fund.
- The amount of $2 million is allocated to the First Responder Presumed Coverage Fund.
- The balance remaining at the end of the fiscal year for the School Aid Fund.
How much online casino tax money will go to Michigan schools?
According to our estimations, the Internet Gaming Fund is expected to receive slightly over $254 million from the collected funds in 2025. Out of this amount, a significant portion exceeding $200 million might be assigned to the School Aid Fund.
This implies that there is a total of $200 million accessible for a diverse range of crucial K-12 services, including special education, early childhood education, school meals, vision and hearing tests, and more.
More than a quarter of the 1.45 million children enrolled in K-12 schools in Michigan could have their school lunches covered for a year using funds generated from online casinos, excluding the Michigan Lottery and online sports betting.
How did we come up with our projections?
The projected online casino state tax of $367,959,588 takes into account the amount paid in the first three months of the year and the quarterly growth from 2022. The total payment for January, February, and March 2025 was $82.4 million.
In 2021, Michigan online casinos contributed $289 million in tax payments. However, in Q1 of 2022, their tax payment was recorded at $64.6 million.
Despite seeming like an ambitious projection, Michigan online casinos are consistently surpassing expectations.
The industry continues to thrive without any indication of slowing down. On the contrary, it is actually gaining momentum. Therefore, until there is a shift in this trend, there is no need to question a projection, even if it appears ambitious.
Due to the implementation of well-designed laws, the achievements in Michigan have the potential to create a long-lasting positive influence.
